Is The (Real Estate) Sky Falling?

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Home Downsizing Solutions

Posted on

Sep 16, 2022

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Nebraska - Eastern Region

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Back in 2008 it seemed that the real estate market would continue strong indefinitely.  Now we know that wasn’t the case.  Homeowners that were considering selling but had somewhat unrealistically high expectations were very disappointed with what they could sell their house for just a year or so later, if they could even find a buyer for it. 

Here we are now in 2022, with possibly having seen the top in the most recent real estate cycle.  Just a few months ago, a seller could put a house “on the market” and likely have multiple offers, above asking price, in just a few days. 

Although we’re still in what I would consider a “seller’s market,” it is much different than earlier this year.  

One of the biggest reasons for this change is the increase in interest rates.  Thirty-year fixed rate mortgages were below 3% in the last 12 months.  Now they are more than twice that rate at approx. 6%.  

Although I have no crystal ball, I would be willing to bet interest rates will continue to rise, given that the Federal Reserve needs to raise their rates to get inflation under control.  This will further negatively affect a potential buyer’s ability to purchase a home. 

The interest rate increases along with the increases in home values, especially over the last couple of years, has greatly negatively affected the affordability to buy a home. 

If you are or were considering selling, using a neighbor’s house that sold earlier this year as a “comparable,” will most likely not be accurate. 

Earlier this year, buyers were often making offers “as is” and not having a whole house inspection contingency as part of their offer.  Now, like in most typical markets, they are wanting to get a whole house inspection to ensure there are no hidden deficiencies before moving forward with a purchase. 

Having multiple buyers bidding on your house is not near as likely to happen. 

Earlier this year, Buyers were much more likely to overlook a house that needed some repairs and updating.  Now, like in most typical markets, Buyers can be more selective of moving forward with a home purchase only if it’s in a “nice” updated condition. 

However, depending on your specific situation, the current market conditions may not have any effect on a decision to sell or not sell your house. 

If you have been waiting for a specific type of apartment to become available, like a ground floor unit that takes pets in a specific part of town, that may be more important than the current market conditions in your decision to sell or not.  

If you have decided its time to move closer to family or friends, finding the right new home or apartment close to them may determine when to sell your current house. 

And unfortunately, if you or a loved one has a health issue or emergency, getting the care and type of apartment or community needed can be much more important than the timing of selling a house in the best market conditions. 

Because of market conditions, maybe you’d like to stay in your current house, if it had certain updates or modifications to make it more livable for your current needs.  There are options available to utilize the equity in your house to make those improvements or pay for in home care. 

If you have only bought and/or sold one or two houses in the last 20 to 40 (or more) years, determining how or when to sell your current house can seem daunting.  Having the right real estate professional that can provide information on current neighborhood valuations, the multiple ways to sell a house, and the resources to help you get from the house you’re in now to the new home or apartment you want or need to get to, can be priceless!  

If you have questions on this subject and/or I can be of assistance, just call or text me at (402)-450-0199.

 

Ben Souchek is an author of the book Home Downsizing Secrets, and the owner and founder of Home Downsizing Solutions, a company that specializes in helping homeowners transition from their current house to a new home, apartment, or other senior living community for more than 25 years.

 

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